Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 7 March, Kakao Corp (035720 KS) announced a tender offer of up to 35% of outstanding shares of SM Entertainment at 150,000 won per share.</li>
<li>We believe that this will be a successful tender offer and the share price of SM Entertainment is likely to surge to near 150,000 won per share. </li>
<li>The minority shareholders of SM Entertainment are cheering on as its share price appreciation will be nearly 96% from end of 2022 to the tender offer price of 150,000 won. </li>
</ul>


On 7 March, Kakao Corp (035720 KS) announced a tender offer of up to 35% of outstanding shares of SM Entertainment at 150,000 won per share.
We believe that this will be a successful tender offer and the share price of SM Entertainment is likely to surge to near 150,000 won per share. 
The minority shareholders of SM Entertainment are cheering on as its share price appreciation will be nearly 96% from end of 2022 to the tender offer price of 150,000 won. 


Kakao Announces a Tender Offer of SM Entertainment at 150,000 Won Per Share

<ul>
<li>On 3 March, it was announced that a Korean court has ruled against SM Entertainment from issuing new shares and CB to Kakao Corp (035720 KS).</li>
<li>HYBE's tender offer period ended on 1 March. It is highly unlikely for HYBE to have successfully completed the tender offer reaching the entire 25% of outstanding shares.</li>
<li>We maintain our position of a high probability of Kakao initiating its own tender offer of SM Entertainment shares in the coming weeks at about 140,000/150,000 won or more.</li>
</ul>


On 3 March, it was announced that a Korean court has ruled against SM Entertainment from issuing new shares and CB to Kakao Corp (035720 KS).
HYBE's tender offer period ended on 1 March. It is highly unlikely for HYBE to have successfully completed the tender offer reaching the entire 25% of outstanding shares.
We maintain our position of a high probability of Kakao initiating its own tender offer of SM Entertainment shares in the coming weeks at about 140,000/150,000 won or more.


Korean Court Rules Against SM Entertainment From Issuing New Shares to Kakao

<ul>
<li>It was reported on 22 February in numerous local Korean media that Oasis Management has invested about 1.5% stake in KT&amp;G Corporation (033780 KS).</li>
<li>This investment in KT&amp;G is reportedly Oasis Mgmt's first investment in Korea. For now, Oasis Mgmt has not made any public announcement about its investment in KT&amp;G.</li>
<li>With Oasis Mgmt investing 1.5% stake in KT&amp;G, we believe it is increasingly likely that it could start its activist campaign on KT&amp;G sometime in 2023.</li>
</ul>


It was reported on 22 February in numerous local Korean media that Oasis Management has invested about 1.5% stake in KT&amp;G Corporation (033780 KS).
This investment in KT&amp;G is reportedly Oasis Mgmt's first investment in Korea. For now, Oasis Mgmt has not made any public announcement about its investment in KT&amp;G.
With Oasis Mgmt investing 1.5% stake in KT&amp;G, we believe it is increasingly likely that it could start its activist campaign on KT&amp;G sometime in 2023.


<ul>
<li>Today (22 February), S.M.Entertainment Co (041510 KS) provided a detailed analysis of the strategic partnership with Kakao from shareholders and fans perspectives.</li>
<li>The timing of this detailed strategic partnership announcement is a bit unusual since it comes <strong>BEFORE</strong> the actual tender offer announcement and potential capital injection into SM Entertainment by Kakao.</li>
<li>Our call on this M&amp;A remains consistent. In the last week of February/early March, Kakao could make a tender offer at prices of at least 140,000/150,000 won, in our view.</li>
</ul>


Today (22 February), S.M.Entertainment Co (041510 KS) provided a detailed analysis of the strategic partnership with Kakao from shareholders and fans perspectives.
The timing of this detailed strategic partnership announcement is a bit unusual since it comes BEFORE the actual tender offer announcement and potential capital injection into SM Entertainment by Kakao.
Our call on this M&amp;A remains consistent. In the last week of February/early March, Kakao could make a tender offer at prices of at least 140,000/150,000 won, in our view.


SM Entertainment: Provides a Detailed Analysis of a Strategic Partnership with Kakao

<ul>
<li>In this insight, we discuss our thoughts on S.M.Entertainment Co (041510 KS) management's official response on why it is opposing HYBE (352820 KS)'s tender offer offer.</li>
<li>Currently, about 85% of SM's employees oppose HYBE's proposed acquisition of nearly 40% stake in SM Entertainment. </li>
<li>In the last week of February/early March, Kakao Group could make an official tender offer at prices of at least 140,000/150,000 won, in our view.</li>
</ul>


In this insight, we discuss our thoughts on S.M.Entertainment Co (041510 KS) management's official response on why it is opposing HYBE (352820 KS)'s tender offer offer.
Currently, about 85% of SM's employees oppose HYBE's proposed acquisition of nearly 40% stake in SM Entertainment. 
In the last week of February/early March, Kakao Group could make an official tender offer at prices of at least 140,000/150,000 won, in our view.


SM Entertainment Mgmt's Response on Its Opposition to HYBE's Tender Offer

South Korea

S.M.Entertainment Co. plans, produces, promotes, and markets Korean rock and roll music in several formats, such as compact discs (CD), concert tours, television productions, and music videos.  The Company also operates artist management business as well as licensing and copyright business from the company's music records.

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S.M.Entertainment Co (041510 KS)

Korean Court Rules Against SM Entertainment From Issuing New Shares to Kakao

On 3 March, it was announced that a Korean court has ruled against SM Entertainment from issuing new shares and CB to Kakao Corp (035720 KS).

Douglas Kim

Oasis Management Invests in KT&G

With Oasis Mgmt investing 1.5% stake in KT&G, we believe it is increasingly likely that it could start its activist campaign on KT&G sometime in 2023.

Douglas Kim

SM Entertainment: Provides a Detailed Analysis of a Strategic Partnership with Kakao

Today SM Entertainment provided a detailed analysis of the strategic partnership with Kakao. The timing of this announcement is unusual since it...

Douglas Kim

SM Entertainment Mgmt's Response on Its Opposition to HYBE's Tender Offer

In this insight, we discuss our thoughts on S.M.Entertainment Co (041510 KS) management's official response on why it is opposing HYBE (352820...

Douglas Kim

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52-week Range

Market Cap (USDm)

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Kakao Announces a Tender Offer of SM Entertainment at 150,000 Won Per Share

On 7 March, Kakao Corp (035720 KS) announced a tender offer of up to 35% of outstanding shares of SM Entertainment at 150,000 won per share. We...

Douglas Kim

Korean Court Rules Against SM Entertainment From Issuing New Shares to Kakao

On 3 March, it was announced that a Korean court has ruled against SM Entertainment from issuing new shares and CB to Kakao Corp (035720 KS).

Douglas Kim

Oasis Management Invests in KT&G

With Oasis Mgmt investing 1.5% stake in KT&G, we believe it is increasingly likely that it could start its activist campaign on KT&G sometime in 2023.

Douglas Kim

SM Entertainment: Provides a Detailed Analysis of a Strategic Partnership with Kakao

Today SM Entertainment provided a detailed analysis of the strategic partnership with Kakao. The timing of this announcement is unusual since it...

Douglas Kim

SM Entertainment Mgmt's Response on Its Opposition to HYBE's Tender Offer

In this insight, we discuss our thoughts on S.M.Entertainment Co (041510 KS) management's official response on why it is opposing HYBE (352820...

Douglas Kim